November 2010: "Cape Town"

From Nouriel Roubini's yfrog page

Roubini's warned that a "flood of liquidity" is going to emerging market economies from South Africa to Asia.

He said: “Eventually we will have another round of asset bubbles and a boom of capital into emerging markets to be followed then by financial excesses, and somewhere down the line, not this year and maybe not next year, but maybe in the next couple of years it’s going to lead to an economic bust.”

November 2010: "Dawn in Frankfurt"

Roubini said growth in all advanced economies, with the possible exception of Germany, would slow due to the end of an inventory-rebuilding cycle, the expiration of large stimulus packages, intensifying fiscal cutbacks, and a higher base effect on growth data. He said despite a second round of quantitative easing, the United States could potentially face a double-dip recession along with Japan and euro zone periphery countries.

November 2010: "Cloudy morning in Copenhagen"

Despite robust growth in 2010, RGE still expect Denmark’s recovery to be gradual with a slowdown in the pace of growth in 2011. The Danish economy will face headwinds from slower export growth, fiscal tightening and a weaker growth contribution from inventory build-up. While fixed investment will return to growth in 2011, household spending will slow. Fiscal consolidation will begin in 2011 and there is a need for large cuts in the coming years to keep public finances on a sustainable path. Monetary policy remains dependent on eurozone interest rates.

November 2010: "View of Cambridge/MIT from Boston"

From Nouriel Roubini's yfrog page

Roubini's outlook on the U.S. is decidedly negative. He warns of another housing collapse in the U.S. leading to another financial crisis: “We are going to have another nasty crisis. That’s going to happen unless we do something about it. Forget about subprime, look at prime.”

Nov. 28, 2010: "Snowy and freezing Prague!"

The Czech Republic is a highly export-oriented economy and its fortunes are largely tied to the economies of its key trade partners, particularly Germany. Fiscal austerity measures, including a 10% across-the-board cut to most government operating spending, will weigh on domestic demand in 2011. Although the Czech Republic has Europe’s lowest nominal policy rate, we see no ammunition for a hike in the near term and expect the central bank to keep rates unchanged at 0.75% through H1 2011.

December 2010: "Photo of my speech in Taipei, Taiwan"

From Nouriel Roubini's yfrog page

In a Taipei speech, Roubini warned about debt troubles in Europe and inflation in emerging markets.

Emerging nations face a challenge in trying to manage long- term capital flows as a “wall of liquidity” flows to their economies, Roubini said. They are restraining their currencies as China’s won’t let the yuan appreciate more, he said.

China can’t be the only “locomotive” of global growth and “you still need robust growth in other advanced economies,” Roubini said. A real-estate bubble has started in China and some Asian property markets also show signs of the same development, he said.

December 2010: "New Dehli"

From Nouriel Roubini's yfrog page

Roubini warns about inflation, but he likes the long-term prospects for India.

“I’m very optimistic about India’s future growth” because the economy is driven by domestic demand while China relies more on exports... “The challenge for India will be to sustain 9 percent growth and at the same time keep inflation under control.”

December, 2010 "Daily public demonstration in Athens"

The recession will continue in 2011 with stabilization of quarterly GDP growth not likely to occur before early 2012. Competitiveness is only gradually being restored. Eurostat’s public debt and deficit revisions reveal the full extent of Greece’s unsustainable debt trajectory. In RGE’s view, a pre-emptive debt restructuring via exchange offer remains highly likely within the next two years. Rating agencies have taken notice of the new European Stabilization Mechanism’s (ESM) preferred creditor status and see Greece as a likely recipient of ESM loans. Further sovereign and bank downgrades will reignite uncertainty and risk aversion in the periphery.

December 2010: "Belgravia, London"

From Nouriel Roubini's yfrog page

Roubini warns the UK is still vulnerable to a double dip recession. He pens in an editorial soon after:

Certainly, the United Kingdom was playing with fiscal fire and needed some commitment to earlier austerity. But phasing in austerity more gradually, and thus back-loading the adjustment, would have posed less risk to the economy's anemic recovery while maintaining a credible commitment to fiscal consolidation.

Instead, the government could well end up with no plan B in case plan A massively front-loaded austerity leads to a double-dip recession.

December 2010: "Paris"

From Nouriel Roubini's yfrog page

Roubini basically says France will one day look like Greece.

“The anger in the street seen during the pension reform could discourage any action until 2012 and the next presidential election,” he said. “But one must not wait too long. One day the markets wake up and it’s too late. No country can be complacent in the face of its deficits."

January 2011: "Sunrise after overnight snowstorm in NYC"

From Nouriel Roubini's yfrog page

Roubini says the bond vigilantes are about to wake up.

“The fiscal problem is very serious... The bond vigilantes have not yet woken up in the U.S. in the way they have in the euro zone. Unless the U.S. addresses this fiscal problem, we’re going to see a train wreck."

January 2010: "Milano"

The export-led economic upswing will lose momentum in 2011 as the positive impetus from the external sector gradually fades and the recovery in domestic demand fails to accelerate. The outlook for private consumption remains bleak given the ongoing deterioration in the labor market, low consumer confidence, accelerating consumer prices and the government’s austerity plan. The implementation of productivity-boosting structural reforms aimed at raising the economy’s growth potential remains the key to guaranteeing the sustainability of public finances beyond the short term.

January 2011: "Davos during the WEF"

From Nouriel Roubini's yfrog page

Roubini acknowledges the global recovery, but he warns of a double dip in the developed world AND of overheating in emerging markets.

"Today there is a global economic recovery, but my view is still two-speed. Emerging markets, China, India, Asia, even Latin America are doing well. I think the recovery in the advanced economy is making us apart. There is still balance sheet repair in both the private and public sector. You see this especially in the periphery of the euro zone and Japan, the U.K. is almost double-dipping. Even in the U.S., the recovery is still weak. The banks are doing better of course--they're being built out, they're being recapitalized at least in the United States in the case of the euro zone, but we still have significant problems in Ireland, Spain, and so on."

Some “emerging markets are overheating” and as inflation is accelerating, “they are behind the curve in terms of policy tightening,” Roubini said at a conference in Moscow today. “In China, Russia and many other emerging-market economies that are emphasizing growth over fighting inflation, if inflation gets out of hand, they have to tighten more in the middle or later part of this year.”

“When I look at the future, I feel comforted by a country like Russia,” (it has) “resilience” (after going through) “several crises over the past hundred years,” whereas the U.S. “can’t sustain shocks,”

February 2011: "Sunrise in Arizona"

From Nouriel Roubini's yfrog page

Roubini recently warned of a debt crisis in Arizona and other states.

“I would say that the condition of state and local governments are extremely serious... There’s a fundamental fiscal problem. Think of it: Greece is only 3% of the Euro zone GDP, while California alone is one seventh of the U.S. GDP. And the trouble is not just in California. It’s California, Arizona, Nevada, Florida, Illinois, New York, and a good chunk of U.S. states.”